E-commerce returns are a major issue for online retailers and customers alike. According to some estimates, e-commerce return rates can be as high as 30%, compared to 9% for brick-and-mortar stores. This means that online retailers have to deal with the costs and logistics of processing, restocking, reselling, or disposing of returned products, while customers on their part have to grapple with the hassle and uncertainty of sending back products that do not meet their expectations.
One of the main reasons for that is the lack of physical interaction with products before buying them. Customers cannot touch, feel, or try on products online, which can lead to mismatched expectations, dissatisfaction, and regret. This is especially true for products that require fit, style, and color preferences, such as clothing, shoes, accessories, or cosmetics.
To address this challenge, many e-commerce platforms are increasingly turning to augmented reality (AR) technology to provide customers with a more realistic and immersive shopping experience. AR technology allows customers to see how products look on them or in their environment before buying them, using their device’s camera and screen. This way, customers can make more informed and confident purchase decisions, reducing the likelihood of returns.
How does AR technology work for e-commerce?
AR technology works by overlaying digital images or information on top of real-world scenes captured by cameras or sensors. For example, customers can use their smartphone's camera to scan their faces and see how different shades of lipstick or eyeshadow look on them. Or they can use their tablet's camera to scan their living room and see how different sofas or lamps appear in their space.
There are different types of AR technology deployed in e-commerce depending on the product category and the user experience. For instance, a type of AR technology allows customers to try on products like glasses, hats, jewelry, or makeup. It does so by helping detect and track the customer’s face and juxtaposition the selected product onto it using image processing and computer vision techniques.
AR technology also allows customers to try on products that are worn on the body, such as clothing or shoes by scanning and measuring the customer’s body shape and size and overlaying the selected product onto it using 3D modeling and machine learning techniques. Other ways that it can help customers interact with customers include using 3D models or checking out how the product in question will look on their person. This technology can also help overlay the selected products onto their live videos and pictures, giving customers a fairly good idea of the suitability or otherwise of the products they are thinking of buying.
How does AR technology help e-commerce with the problem of returns?
Deploying AR technology in the e-commerce marketing and sales process can help bring down returns dramatically. Here's how that is done-
1) Enhancing customer satisfaction and confidence:
AR technology allows customers to see how products look and feel either on their persons or in the surroundings that they are in quite realistically. This helps reduce uncertainty and any hesitation they might have normally had when making an online purchase and substantially increase their trust and loyalty to the products in question. Besides, the customers can also have lots of fun shopping this way!
2) Helping improve product listing:
AR is helping online retail businesses enhance their product listings in innovative ways, thereby empowering their customers to make better and more informed shopping decisions. This ensures they would have lesser reason to regret their decision later. More engaging product visuals depicting key attributes of the products in question very clearly make product listings that much more useful in allowing customers to choose just the product that suits their requirements in a very accurate manner. This helps bring down the returns significantly.
3) Promoting the try-on before buying concept:
Perhaps the most important reason for AR helping bring down returns in a major way is the fact that it helps e-commerce businesses leverage the try-on before buying concept. For instance, AR product visualization helped online retail company Macy's reduce their returns to an incredible less than 2%, which is quite impressive, considering that the average furniture industry returns results are in the 5 to 7% returns rate.
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